The Relationship between Audit Committee Characteristics on Accounting-based Performance (ROA and ROE) as a Measure of Performance Evidence from Jordan

International Journal of Business and Digital Economy Vol 2 No 2 (2021) 15–27

13 Pages Posted: 1 Sep 2021

See all articles by Saddam Ali Shatnawi

Saddam Ali Shatnawi

Universiti Sains Islam Malaysia (USIM)

Monther Eldaia

Al-Aqsa University; Universiti Sains Islam Malaysia (USIM) - Faculty of Economics and Muamalat

Ahmad Marei

Middle East University

Saad AL Aaraj

Sciences Gates

Date Written: August 2, 2021

Abstract

The study aims to investigate the effect of audit committee characteristics, represented in (size, independence, and meeting) to the enhancement of performance, for a sample of 460 Jordanian non-financial companies listed at Amman Stock Exchange (ASE) during the period of (2014-2018). To achieve this goal, the performance was measured using the return on assets (ROA) and return on equity (ROE). The study also utilized two control variables in order to help to measure the relationship between audit committee (AC) and performance. Overall, A fixed-effect model was used to test various hypotheses of the study. The study found a significant positive relationship between the auditing committee characteristics (AC size, AC independence, and AC meeting) with ROA and ROE in the Jordanian non-financial listed Companies. The study contributes to the literature on audit committee characteristics and performance in developing countries, especially in Jordan. Our findings contribute towards better articulating and applying a more concrete measure of performance that as an accounting based performance (ROA, ROE). This study provides useful information that is of great value to policymakers, academics, and other stakeholders. Based on the study results, researchers made a number of recommendations that include: researchers and academic staff must study in the future researches some of the other variables, such as expertise in AC, Muslim director in AC, and activities in AC in order to enhance corporate at Amman Stock Exchange.

Keywords: AC size, AC independence, AC meeting, accounting-based performance, Jordan.

Suggested Citation

Shatnawi, Saddam Ali and Eldaia, Monther and Marei, Ahmad and Aaraj, Saad AL, The Relationship between Audit Committee Characteristics on Accounting-based Performance (ROA and ROE) as a Measure of Performance Evidence from Jordan (August 2, 2021). International Journal of Business and Digital Economy Vol 2 No 2 (2021) 15–27, Available at SSRN: https://ssrn.com/abstract=3897445

Saddam Ali Shatnawi

Universiti Sains Islam Malaysia (USIM) ( email )

Bandar Baru Nilai
Nilai, Negeri Sembilan 71800
Malaysia

Monther Eldaia (Contact Author)

Al-Aqsa University ( email )

Gaza Strip
gaza
Gaza, GA h 0599
Palestine
+970594709595 (Phone)

Universiti Sains Islam Malaysia (USIM) - Faculty of Economics and Muamalat ( email )

N.Sembilan
Malaysia

Ahmad Marei

Middle East University

Sabtieh
Boushrieh
Amman
Jordan

Saad AL Aaraj

Sciences Gates

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